How Long Should You Keep Employment Records?

It’s a great question! Check out the IRS page on Employment Tax Recordkeeping. In general, all records pertaining to employees and employment taxes should be retained for at least four years after the year of employment tax filing.

Protect Yourself and Your Business from Fraud

You receive an email from one of your employees asking to change their bank account for direct deposit. How do you know it’s a legitimate request? Is this actually your employee . . . or is the request coming from an impersonator who wants to direct the funds into their own account?

Your boss sends an email asking for a copy of employee Form W-2s. You want to be responsive . . . but does this request make sense?

You receive a phone call from a vendor asking you to update their payment method. Should you do it?

The National Automated Clearing House Association (NACHA) provides the following tips for counteracting fraud in your payment systems:

Recognize that attacks can come via email, phone calls, faxes, or letters in the mail
If the change in payment instructions come with a sense of urgency, proceed cautiously! Make sure the request is legitimate and ask questions – don’t be pressured into acting quickly.
Independently authenticate any payment changes. For instance, don’t reply to the email but start a new email using the sender’s known email address to verify the change. Or better yet, pick up the phone and call the sender using verified contact information (not the phone number provided in the original request).
Make vendor payment forms available only through secure channels or to known entities.
If you’re contacted by your bank questioning the legitimacy of a payment, don’t ignore it.

One way to mitigate employee direct deposit fraud is to ask employees to make bank account changes themselves through the Mize secure payroll portal.

Criminals use all sorts of methods to impersonate employees and vendors. Take the time to ensure that any changes or requests for information are legitimate before taking action – you’ll be glad you did!

IRS Announces Lower Threshold for 2024 Electronic Filing of Information Returns

Information returns for tax year 2023 filed after December 31, 2023, must be electronically filed if a business has 10 or more returns. In determining whether the number of returns filed by a business exceeds 10, all information returns filed by the business will be considered. Forms that are affected by this threshold include the many versions of Forms 1099, 1097, and 1098, as well as the Affordable Care Act Forms 1094 and 1095.

For more information about Form 1099s and other information returns, visit the IRS website.

State News

California

COVID-19 Reporting Requirements – The California Department of Industrial Relations has announced COVID-19 prevention non-emergency regulations are in place effective February 4, 2023, and are anticipated to remain in effect through February 23, 2025. Employers are responsible for maintaining a written Injury and Illness Prevention Program and instituting measures to protect employees. You can read the news release here and reporting requirements for Cal/OSHA here.

Disability insurance (SDI) rate increase – For 2023, the disability insurance elective coverage rate for employers electing state disability insurance (SDI) has increased to 6.93%, up from 5.64%, up to the annual wage base of $153,164.

Maintaining Employment Records – Starting January 1, 2023, an employer must keep records of the job title and wage rate history for each employee for the duration of their employment plus three years after their employment terminates. These records are subject to inspection by the Labor Commissioner.

Pay Scale Required for Job Postings – Beginning January 1, 2023, employers with 15 or more employees must include the pay scale for a position in any job posting. The pay scale does not need to include bonuses, tips or other benefits, but must include piece rate or commission if the position’s compensation is based on those factors. The pay rate must be displayed in the posting and not accessible only through a link or QR code. Penalties for the violation of this requirement range from $100 to $10,000 per violation.

San Francisco Minimum Wage Increase – Effective 7/1/23, the San Francisco minimum wage will increase to $18.07 per hour, up from $16.99 per hour. An updated poster for employee common areas can be found by clicking here.

Illinois

New Pay Data Reporting – Effective in 2023, Illinois employers with more than 100 employees will be required to report detailed pay data to the state. This is based on and in addition to the federal EEO-1 report due each year.

The purpose of this enhanced reporting is to provide greater transparency for employees on wage and benefits for a given job classification or title. It also provides employers additional information they need to provide competitive salaries in the workplace.

The new report must list all employees from the past year separated by gender and race, along with total wages paid to and hours worked by each employee within the last year. Reporting includes an Equal Pay Certificate signed by an authorized company representative.

The Illinois Department of Labor will communicate directly to businesses when it is time for them to register. Each business will receive advance notice of at least 120 days before their registration deadline.

Our Mize payroll department is gearing up to assist you with these new reporting requirements. Please contact your payroll professional once you receive notification of your reporting deadline.

Oregon

2023 Workers' Benefit Fund assessment is unchanged from 2022 rate – The Oregon Department of Consumer and Business Services announced that the Workers' Benefit Fund (WBF) assessment is 2.2 cents per hour worked in 2023, unchanged from 2022.

The 2.2 cents-per-hour rate is the employer and worker rate combined. Employers contribute half of the hourly assessment (1.1 cents per hour) and deduct the other half from worker's wages.

Employers report and pay the WBF assessment directly to the state with other state payroll taxes.

The WBF assessment funds return-to-work programs, provides increased benefits over time for workers who are permanently and totally disabled, and gives benefits to families of workers who die from workplace injuries or diseases.

Oregon Workers' compensation premium assessment increases for 2023 for self-insured employer groups – For 2023, the Oregon workers' compensation premium assessment, which covers the costs of administering the state's workers' compensation and worker safety programs, is as follows:

Insurance providers: 9.8% (no change from 2022)
Self-insured and public-sector self-insured insurance groups: 10.3% (an increase from 9.9% in 2022)
Private-sector self-insured employer groups: 10.3% (unchanged from 2022)

When it comes to Mize Payroll 2.0, Ann knows it all! Here are two tips and tricks she's put together for you.

Predict My Pay Now Available

Have a tip or trick you'd like Ann to cover? Let her know, ahobart@mizecpas.com

Tools You Can Use

Electronic Pay Solutions

Employees like to get paid on time. Sometimes that’s harder than it might seem. With delivery issues, severe weather, and wildfires frequently in the news and maybe even your back yard, getting paychecks to employees can be difficult. That’s where electronic payroll solutions like direct deposit and pay cards can be a great solution.

Electronic pay solutions can also save you money. The costs of both printing and delivery are going up, which increases your payroll fees. With direct deposit and pay cards, employees can access their pay stubs and year-end Forms W-2 and 1095 online through the Mize payroll portal.

Read more about the benefits of electronic pay from our Insights blog by clicking here.

Earned Wage Access

Even if employees get paid on time, sometimes that money doesn’t stretch until the next payday. Stuff happens – the washing machine overflows, the car breaks down, or somebody gets sick. Sometimes employees need money sooner than later, but there aren’t a lot of great options. Payday loans, overdrawing their checking account, and incurring credit card debt can chock up high fees. The employer can give a pay advance or loan, but that can put you in a difficult position.

That’s where an Earned Wage Access (EWA) program can help. EWA programs are a new employee benefit that advances employees a certain amount or percentage of their accrued wages. The employee’s next paycheck is automatically reduced by the advanced amount, with no risk or liability to the employer.

For more information about ZayZoon, the EWA program offered through Mize CPAs, click here or visit with your Mize professional.

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